I have a judgment against me for a Citibank credit card. Citibanks

Customer Question

I have a judgment against me for a Citibank credit card. Citibank's attorneys have me scheduled for a deposition tomorrow to tell them about all my assets, income, etc,... To avoid having to go to the deposition, exposing what little I have left (much financial trouble of past few years), I'm about to sign a Payment Plan for the debt (about $20,000). Although I'm thinking of filing a Chap-7 Bankruptcy as well.

In this Payment Plan agreement it has the following: ...."Debtor further agrees that Debtor will not file any claims, complaints, arbitrations, or proceedings with any agency or court with respect to the matters released in this Agreement against any of the aforementioned."

So here's my question: If I sign this Payment Plan, with the above mentioned language in it, does this mean I CAN NOT include this debt/judgment in a Bankruptcy if/when I decide to file later?

However, there is NOT a lot of case law out there on this point, and there are some cases and judges out there that suggest IF a party agrees or promises to pay a debt, then it is NOT dischargeable.

Thus, the best thing to do is either NOT sign the agreement, or either add a few words to the sentence you quoted to specifically except bankruptcy out of the provision. In other words, you could say nothing in this agreement prohibits you from filing bankruptcy and this agreement doesn't make the debt non-dischargeable if bankruptcy were filed (or something like that).

You don't want to put yourself in a position to have to litigate this issue with a creditor who has deep pockets! Even if you're legally right, you may not have the money to withstand the fight over this issue.

Thus, the best options are to either not sign the agreement at all or add language to make sure that you're not giving up your right to file bankruptcy and receive a discharge for the debt.

Understood - Thanks. But if I don't sign, theoretically, I am still obligated to go to the deposition tomorrow. And I've read that if one misses a deposition, the cost of the court recorder and misc. other costs can be levied against me (well over $1,000) - and maybe be held in Contempt of Court. So, kinda stuck if I sign,... kinda stuck if I don't sign. Ideas?

If I don't sign AND I don't go to the deposition,... AND Citibank's attnys hit me with above mentioned costs,... can those costs be wiped out by the BK?

Yes, you are required to appear for the judgment debtor examination UNLESS you reach an agreement and the deposition is called off. Also, if you don't appear, then you could be assessed the costs - including the attorney's fees and court reporter fees - of the deposition.

Also, if there's a court order directing you to appear tomorrow, then you could be charged with contempt of court as well. That's the biggest issue because a contempt charge could lead to fines and even jail time (unlikely but nevertheless possible). Any costs assessed by the judge for failing to appear (attorney's fees, court reporter fees) should be dischargeable in the bankruptcy if you were to file. However, if you are fined for being in contempt of court for failing to appear, that should not be dischargeable.

Thus, IF you don't have an agreement worked out, it is very much in your best interest to appear. Also, if you're going to file bankruptcy, then whatever you tell them isn't going to make a lot of difference because the creditor won't be able to come after you for anything because Citi's judgment/debt is unsecured (not secured by collateral - - car, boat, etc.), so the debt will be discharged in bankruptcy - meaning it likely would not receive any money.

The best way to approach this is likely to offer to agree to repay the debt WITH the language that you're not giving up your right to file bankruptcy and have this obligation discharged, and you can tell the creditor that IF they refuse, you will proceed with filing bankruptcy, which will guarantee that they won't receive any money. Thus, the best option is to give you a chance to repay the money - - as the other option means they'll get nothing.

The paralegal at Citibank's attny's office said they have already put an "x" by my name on tomorrow's list of people being deposed (meaning I won't/don't need to show up) because I said I would sign this agreement and send it back in the mail (and obviously them not receiving it till after tomorrow's scheduled deposition). So, If I understood her correctly I'm already excused from showing up tomorrow (but only if I DO sign and return this payment plan). So, how bout this:

What if I handwrite the "Doesn't prevent me from doing a BK" language you suggested on the agreement and send THAT back to them? Would I be covered from not showing up at the deposition even knowing they'll fuss about me putting in my own language once they get it?

I'm quite sure I'll file BK very soon. My worry is that if I go to the deposition, tell them I have a van with a bit of equity (maybe 4-5k), furniture, a bit of income (audio tech subcontractor),... that they may be able to get any/some of the above before the BK is far enough along to protect it/me.

IF you were my client, the ONLY way I would advise you not to show is IF you have something in writing from the creditor saying you don't have to appear. So, maybe call the paralegal and ask her to email you a letter or just a reply stating that the deposition has been called off for tomorrow in lieu of you trying to reach a settlement. If you can do that, then I would think you're ok not to show.

Thus, if you add the language and send it in, and they don't like it or if they want to negotiate terms, then you're still fine because the deposition was called off so you could TRY to reach a settlement. If the paralegal says it's called off because you agreed to sign our release, then that's not really accurate because you're not agreeing to sign the release AS WRITTEN. You should be clear that this isn't a done deal, and instead that you're WORKING ON A SETTLEMENT AGREEMENT. As long as you get something like that in writing, you should be ok.

As for the creditor's ability to liquidate your property, it would be VERY difficult for the creditor to do this before you could file. A bankruptcy petition can be filed within a few hours, so if you knew they were coming after you (they would have to sue you and then take a judgment before being able to attach anything - - which would give you plenty of time to file), you could file and stop them.

I will tell you that...the things you have to go through to be an Expert are quite rigorous.

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